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Australia – Greentape Reduction Act – Policy Considerations.

31 August, 2012

 

Legal News & Analysis – Asia Pacific – Australia – Environment 

 

Practical impacts of the Greentape Reduction Act on efficiency, discretion and consistency

 

In brief

 

  • The Environmental Protection (Greentape Reduction) and other Legislation Amendment Act 2012 is forecasted to reduce cost, minimise complexity and increase certainty in application approvals. 
  • Small to medium size projects which are able to operate under “standard conditions” will take the majority of benefits. 
  • Larger operators might expect some reduction in timeframes for securing approvals, but in terms of conditioning and decision maker criteria, it appears to be business as usual.

 

The promise of greentape reduction

 

The Environmental Protection (Greentape Reduction) and other Legislation Amendment Act 2012 (“the Act“) constitutes the first substantial review of the Environmental Protection Act (“EP Act“) since its introduction in 1994.

 

According to Minister Powell, expectations for improvements are high. Forecasts in the first reading speech indicate that the Act will:

 

  • lead to easier, cheaper and more certain environmental approvals;
  • save Queensland businesses an estimated $11.7 million each year;
  • cut 90 pages of regulation (more than 12% of the EP Act; and
  • contribute greatly towards the LNP’s goal of cutting red tape by 20%.

 

In achieving this goal, the stated policy objectives of the Act are to:

 

  • streamline the approvals process for mining and petroleum projects;
  • introduce flexible operational approvals and a licensing model proportionate to environmental risk;
  • clarify information requirements; and
  • achieve these objectives whilst maintaining environmental standards.

 

The Department of Environment and Heritage Protection (“DEHP“) is preparing a number of detailed guidelines intended to clarify the operation of the Act for both proponents and decision makers, however, these are not yet publicly available.

 

We examine some of the practical issues of the Act faces in delivering these policy objectives and consider what the amendments mean in terms of efficiency, discretion, and consistency in practice.

 

Streamlined approvals for resource activities

 

The greentape reduction project was established in response to business and government concerns that environmental regulation had become unnecessarily complex and difficult to navigate. The Government’s response was to clarify and simplify the approvals process by:

 

  • introducing a single ERA for “Resources Activities”;
  • establishing a single, modular approval process, with set timeframes for progression through each stage;
  • creating avenues to avoid duplication of information and processes (for example, for projects which already have an EIS).

 

We consider that:

 

  • introducing a modular system (modelled on the Sustainable Planning Act 2009 (Qld)) that applies to all activities goes some way to clarify and simplify the approvals process;
  • removal of duplication for those projects which have already prepared and advertised an EIS is a sensible and useful attempt to reduce red tape on larger projects; and
  • for site-specific assessments which do not have an EIS (and have to pass through all levels of the modular assessment process) it remains to be seen whether the timeframes set under the Act will be adhered to (note that the timeframe for the information and decision period may be extended if the applicant provides written consent).

 

Flexible operational approvals and licensing model proportionate to environmental risk

 

During consultation, industry groups raised concerns that assessment did not properly reflect the risk posed by the activity and that low risk developments were often subject to the same assessment processes as high risk projects. The Government’s response was to introduce a three tier assessment structure based on the risk the activities pose to the environment.

 

We consider that:

 

  • small scale developments (which involve only eligible ERAs) will benefit from a short form assessment process, albeit that we are yet to see the “standard conditions” which will apply to eligible ERAs;
  • it remains to be seen whether inappropriate standard conditions may, in reality, lead to a wave of variation applications for standard approvals (placing pressure on resources and pushing out timeframes);
  • regardless, the majority of medium to large projects will involve a site-specific (non-standard) assessment process (that is, one to which standard conditions will not apply);
  • for site specific (non-standard) assessments, the criteria for deciding to grant/refuse a site-specific application (including the standard criteria), and the power to impose conditions, is effectively unchanged; and
  • as a result, while the three tier assessment structure has great potential to benefit smaller operators satisfied to comply with standard conditions, medium to large operators can expect little change.

 

Clarifying information requirements

 

During consultation industry groups raised concerns that more guidance was needed at the application stage, as the cost of responding to information requests is expensive and often, does not materially affect the outcome.

 

The Government’s response was to:

 

  • remove the requirement for an environmental management plan (“EMP“) (which has effectively become an application document);
  • reduce the amount of information to be assessed; and
  • provide improved guidance on information to be provided and considered in decision making.

 

We note that:

 

  • the decision to remove the requirement for an EMP (with the requirements of the EMP being merged into the application process) will likely lead to a reduction in cost and time associated with preparing supporting material;
  • similarly, larger proponents will take the benefit that any EIS documents previously prepared for the project will automatically form part of the application documents for an EA;
  • while the DEHP has foreshadowed the provision of a more detailed application form, as well as detailed guidelines on the types of information to be provided, and considered in decision making, these documents are not yet publicly available; and
  • regardless, for larger proponents, the EIS system will replace the information and notification stages of the assessment process under the EP Act. As a result, the amendments will have little impact.

 

What do these changes mean for breadth of decision makers discretion?

 

During consultation, industry groups raised concerns about the significant uncertainty regarding the information required to support applications and the inability to anticipate the likely outcome of project approvals and conditioning.

 

The Government’s response was to: 

 

  • create standard conditions which will automatically apply to standard applications if the proposed activities are all eligible ERAs;
  • limit and streamline the information which administering authorities are required to assess in making decisions; and
  • provide detailed guidance to decision makers.

 

We consider that:

 

  • as the “standard conditions” for eligible ERAs are not yet available it is difficult to determine whether the short form assessment process will improve outcomes for small scale developments;
  • similarly, the limits introduced on information to be considered in “variation applications” apply only to variations of standard approvals, with medium to large scale operators (who will require site-specific (non-standard) approvals) taking no benefit from this reform;
  • in relation to decision making and conditioning powers for site-specific (non-standard) approvals, the criteria outlined in the Act do not limit the conditions which the DEHP may impose and the standard criteria are essentially unaltered.

 

New discretionary powers include:

 

  • expansion of the statutory grounds for the DEHP to initiate EA amendments, including where a “compliance statement” and “annual return” is given; and
  • a new decision process around classification of “major” and “minor” amendments, which determines the assessment level which will apply to the amendment application.

 

EPBC issue – Impacts on bilateral arrangements

 

A new Bilateral Agreement between the Commonwealth and the State of Queensland under section 45 of the Environment Protection and Biodiversity Conservation Act (1999) was entered into on 14 June 2012.

 

Section 35 of that Agreement, (Interpretation) relevantly provides as follows:

 

A reference in this agreement to … the Queensland Environmental Protection Act 1994… is a reference to the relevant Act as in force at the date of the amending agreement of December 2009. If any of the Acts are subsequently amended in a manner that affects the operation of this agreement, then the parties will as soon as practicable consult on whether it is necessary to make another bilateral agreement varying or replacing this agreement.

 

As a result, it is anticipated that the two governments will need to review the operation of the bilateral agreement to take account of the Act’s process changes, although that review may not necessarily lead to any change to the bilateral agreement.

 

Lessons

 

  • We consider that the determination of improved clarity and consistency in decision making, hinges on the “guidelines”, which the DEHP is yet to provide.
  • The detail and interpretation of those guidelines, as well as their binding force, may improve a proponent’s understanding of the type of information to be provided, and therefore increase the likelihood of securing a favourable outcome.
  • In our view, the new Act and the guidelines are unlikely to circumscribe or limit the DEHP’s ultimate discretion in decision making and conditioning power.

 

 

For further information, please contact:

 

John Briggs, Partner, Ashurst

john.briggs@ashurst.com

 

 Tamieka Gilmour, Ashurst

tamieka.gilmour@ashurst.com

 

 

 

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